Question

Miller Corporation’s December 31, 2019, bank statement showed a $2,049.25 balance. On this date, Miller’s Cash account reflected a $146.90 overdraft. In reconciling these amounts, the following information is discovered:

1.	Cash on hand for undeposited sales receipts, December 31, $130.25.
2.	Customer NSF check returned with bank statement, $419.20.
3.	Cash sales of $634.25 for the week ended December 18 were recorded on the books. The cashier reports this amount missing, and it was not deposited in the bank.
4.	Note receivable of $2,400.00 and interest of $24 collected by the bank and not recorded on the books.
5.	Deposit in transit December 31, $330.00.
6.	A customer check for $195.40 in payment of its account was recorded on the books at $945.10.
7.	Outstanding checks, $2,035.55. Includes a duplicate check of $70.85 to C. Brown, who notified Miller that the original was lost. Miller stopped payment on the original check and has already adjusted the cash account in the accounting records for this amount.

	Required:
1.	Prepare a December 31 bank reconciliation for Miller.
2.	Prepare any journal entries necessary by Miller to record the information from Requirement 1.

Answer 1

Bank Reconciliation
Balance from bank statement		$    2,049.25
Add:deposit in transit	$     330.00
Cash on hand(undeposited sales receipts)	$     130.25	$       460.25
		$    2,509.50
Less:Outstanding checks		$ (2,035.55)
Adjusted cash balance		$       473.95
Balance from company records		$     (146.90)
Add:note collected by bank	$ 2,400.00
interest on note	$        24.00	$    2,424.00
		$    2,277.10
Deduct:Missing deposit	$     634.25
Error in recording(945.10-195.40)	$     749.70
NSF check returned	$     419.20	$ (1,803.15)
Adjusted cash balance		$       473.95

Date	Accounts	debit	credit
Dec-31	Accounts receivable (error)	$     749.70
	Accounts receivable (NS check)	$     419.20
	Loss from cash shortage (missing deposit)	$     634.25
	cash		$ 1,803.15
Dec-31	cash	$ 2,424.00
	notes receivable		$ 2,400.00
	interest revenue		$        24.00